If a customer values good A at $15,and it costs the firm $10 to produce,the firm can increase its profits if
A)Redesign the product such that it delivers $16 in customer value
B)Redesign the production process so that the costs fall to $9
C)One or both of the above
D)None of the above

Question

If a customer values good A at $15,and it costs the firm $10 to produce,the firm can increase its profits if​
A)​Redesign the product such that it delivers $16 in customer value
B)Redesign the production process so that the costs fall to $9
C)One or both of the above
D)​None of the above

Quizplus · Accepted Answer

Both options A and B can result in an increase in profits for the firm. Option A increases the perceived value of the product, allowing the firm to potentially charge more and increase its profit margin. Option B decreases the production costs, allowing the firm to keep the same price while increasing its profit margin. By implementing both options, the firm can potentially maximize its profits.

If a Customer Values Good a at $15,and It Costs